Tuesday, May 17, 2016

Nothing Of Note On Today's Daily Activity Report -- May 17, 2016

Active rigs:

Active Rigs2683190189211

Other than Whiting renewing one permit (#31112, Chameleon State 31-16-1H) and canceling one permit (#31115, Chameleon State 31-16-2H), there was nothing on the daily activity report except for the five wells coming off confidential list noted earlier today.

There appear to be no wells scheduled to come off the confidential list Wednesday (link here). 

Front Page Internet Edition, WSJ: Shale Survivors In The Bakken -- May 17, 2016

Link here.
WILLISTON, N.D.—Amid the abandoned worker camps, idled drilling rigs and empty field-office parking lots of western North Dakota, a shale industry reshaped by the oil-price collapse is beginning to emerge.
As the number of failed operators mounts, the surviving companies are laying the groundwork for what they forecast will be an era of slower but steadier growth in the state at the epicenter of the U.S.’s energy boom.
Cash-strapped operators are dialing back or abandoning North Dakota. But the survivors—many of which are bigger and more diversified players—are finding ways to make the Bakken Shale formation pay even at low oil prices by trimming budgets, improving field logistics and focusing on their best assets.
This downturn marks the first bust since the rise of so-called unconventional shale-oil plays nearly a decade ago, fueled by new technologies, ready access to capital and a surge in crude prices to record highs. One of the world’s highest-cost oil fields, the Bakken is key test ground for the U.S. energy industry’s wherewithal.
You can’t shut down the Bakken. The American oil industry is getting smarter and more efficient” in how and where it drills, said Kathy Neset, a veteran geologist who owns a consultancy in Tioga, N.D. “We’ve still got pins on the wall,” she said, pointing to a map with the location of active rigs.
The rest at the link.

Shoot Out At The O-K Corral -- May 17, 2016


May 22, 2016: not much news/updates on perhaps one of the biggest "crime" stories coming out of Boomtown so far this year. Data points:
  • three guns
  • up to 16 shots fired
  • the two fatalities were in their young 20's; originally from Ohio
  • male / female questioned but not detained
  • self-defense "has not been ruled out"
  • not a home invasion
Original Post
Williston Herald reports:
  • in new apartment complex northwest Williston
  • one man, one woman being questioned
  • two men shot and killed
  • three guns found at the scene
  • 11:20 a.m.: multiple 911 phone calls received; shortly thereafter local police arrive
  • 1:00 p.m. NDBCI on-scene
  • 1:30 p.m. everyone accounted for; no gunman on the loose
  • not sure if guns belonged to victims (both out of state) or to individuals who lived in the apartment
  • Later: not believed to be home invasion
The way the story reads suggests the victims did not live in the apartment: "... unsure whether [the guns] belonged to the victims or the people who lived in the apartment.

Macro-View: US Energy Production - Consumption Through 2040 -- EIA

Many, many story lines.

The most obvious story line -- compare production-consumption of each energy source; the delta is that energy available for export (or wasted).

For example:
  • renewable at 18 quadBtu production and 16 quadBtu consumed (unlikely to export much renewable energy, thus wasted)
  • nuclear: production exactly equals consumption, as expected
  • coal: slight excess production over consumption will allow export 
  • petroleum and other liquids: interesting, huh? production remains well below what we consume; looks like about 24 quadBtu produced in 2040 while we will consume 38 quadBtu (still a huge net importer of oil, liquid gas); the question, of course, where will that come from; certainly Saudi will be a net importer by then; Venezuela, Canada, Russia, most likely
  • natural gas: as interesting as petroleum but for different reason -- US will produce 42 quadBtu in 2040 (let's say "40 in 40") and will use slightly less, about 38 quadBtu: the delta would be available for export?
It would be interesting to see how much natural gas is needed to "back-up" unreliable/intermittent energy. Could it be as much as four or five quadBtu? I have no idea.

Back to the graphs, for 2015:
  • natural gas: production/consumption almost dead equal at 28 quadBtu; if anything, production slightly less than consumption
  • oil, liquid gas: huge delta and doesn't really get all that much better over time
  • one can see the wastefulness of renewables (despite being entirely "free" [LOL] and completely CO2-emission free [LOL] it is not all used -- despite producing about 10 quadBtu, the US only consumes about 8 quadBtu; one assumes the 2 quadBtu is wasted; generated when it is not required
  • nuclear: best balanced; all produced is consumed

From wiki, the IRS defines a boe as 5.8 x 10^6 Btus = 5,800,000 or about 6 million Btus.

One quadrillion in the US, according to wiki, is 1 x 10^15, or one thousand million million.
Oil and Liquid Gas

2015: production about 18 quadBtus; consume about 38 quadBtus; delta of 20 quadBtus;
2040: production about 24 quad Btus; consume about 38 quadBtus

Percent increase consumption: 38 - 38 = 0 quadBtus
Percent increase production: 24 - 18 = 6quadBtus

6 thousand million million Btus/6 million Btus = 1 thousand million boe per year to be imported / 365 = 3 million boepd? If accurate math, that's well below the 4 million bopd important from Canada currently.

I often make simple arithmetic errors. Boe and bbls of oil were used interchangeably in some of the equations because that's all I had to work with.

Tuesday, May 17, 2016 -- Mr Big Stuff -- Who Do You Think You Are?

Mr Big Stuff. Pipelines. PennEnergy is reporting that TransCanada will acquire Columbia Pipeline Group in a deal valued $13 billion, including debt ($25.50/share in cash). At $25.50, this represents a premium of 32%. CPG:
  • HQ: Houston, TX
  • 15,000+ miles of interstate pipeline, gathering and storage assets
  • from New York state to Gulf of Mexico
  • integrated with one of the largest underground natural gas storage systems in North America
  • major pipeline network in northeast US
  • perhaps two jewels:
    • first: a 12,000-mile pipeline system transiting 10 states: the Columbia Gas Transmission line
      • this jewel also operates that large NG storage system: 37 storage fields in four states; 650 billioin+ cubic feet in total capacity
    • second: a 3,400 mile interstate pipeline, primarily in four states: LA, MS, TN, KY: the Columbia Gulf Transmission
Mr Big Stuff, Jean Knight


Mexico's gasoline consumption increasing; imports increasing. Reuters reports.

Common theme from multiple sources today: China "moving."
  • China is about to go on a huge US shopping spree
  • China just overtook Canada as the largest foreign buy of US residential real estate
US industrial production jumps by most since November, 2014. The AP is reporting. Data points:
  • industrial output rose 0.7%, after dropping previous two months
  • industrial production improved because utility output surged following an unusually mild March
  • utility output: biggest jump since February 2007 (simply a function of a "down" month in March
  • factory output rebounded 0.3%, the most since January; auto and machinery production led the way
  • falling dollar helped (improved exports)
  • mining (includes oil and coal): dropped 2.3%; the pain is not over 
Japanese March industrial output up 3.6% -- Reuters.
  • again: due to a fluke, one-time factors
  • huge drop in February due to Lunar New Year holidays in Asia 
  • Toyota Motor Corp's temporary halting of factory output due to an explosion at a steel plant 

EIA's Monthly Drilling Productivity Report (May, 2016) Data Now Posted

Recommendation: disregard my notes completely and go to the linked sources directly.

EIA's monthly drilling productivity report for May now posted. Link here: http://www.eia.gov/petroleum/drilling/.

Bakken pdf here. Some data points:

Bakken region oil production for May, 2016: decreased by 31,000 bopd from April, 2016.
  • production change from legacy wells: a decrease of 55,000 bopd
  • production change from new wells: an increase of 24,000 bopd 
New-well oil production per rig, increased at all but one play*:
  • Niobrara, increased by 23 bbls to 915 bbls/day/new well
  • Eagle Ford, increased by 23 bbls to 994 bbls/day/new well
  • Bakken, increased by 17 bbls to 832 bbls/day/new well
  • Permian, increased by 13 bbls to 493 bbls/day/new well
*This is from the chart. A screen-shot of this chart is below. Note that the chart shows "June 2016" data and does not say this is "estimated." The PDF has a completely different number. The pdf says the April, 2016, monthly addition from one average rig was 757 bbls whereas the May, 2016, monthly addition from one average rig was 767 bbls.

Tuesday, May 17, 2016

When something happens overnight with no explanation, one needs to start following the dots. The overnight event? The back-up in TSA lines. Literally, the story popped up overnight and stories coming out of the terminals suggest the TSA agents are standing around, joking, no sense of urgency. So, let's back track this:
Just in time for presidential election this November ← reports of work slowdown first surfaced in Chicago's Midway ← find cities with strong union support; home of community organizers ← TSA work to rule ← how to get TSA attention, media coverage? ← how about 4,000 more TSA agents? ← which unions, where? ← expand unions ← more voters needed, especially in swing states like Illinois ← need expanded voting blocs in time for November election
Active rigs:

Active Rigs2883190189211

RBN Energy: Alberta's oil sands after the wildfires.

Saudi Arabia: CNBC reports an Energy Aspects analysis of Saudi Arabia's plans for increased oil production. For the archives.

US shale production: US shale output to drop for eighth consecutive month, EIA -- Reuters. U.S. shale oil output is expected to fall in June for the eighth consecutive month.
Total output is expected to fall by nearly 113,000 bpd to 4.85 million bpd, according to the U.S. Energy Information Administration's (EIA) drilling productivity report released on Monday.

Bakken production from North Dakota is forecast to fall 27,000 bpd, while production from the Eagle Ford formation is expected to drop 58,000 bpd. Production from the Permian Basin in West Texas is expected to drop 10,000 bpd, according to the data, representing its second consecutive monthly decline. 
Saudi Arabia not mentioned. What's up? Bloomberg/Rigzone is reporting:
Algeria will supply oil and other energy products to Jordan for the first time under a memorandum of understanding signed on Monday, as the OPEC member seeks to diversify sales after years of stagnating crude production.
Sense of energy urgency in Japan. Bloomberg/Rigzone is reporting:
Energy companies in Japan, a country almost entirely reliant on fossil fuel imports, are slashing investments by more than one-third following the collapse in commodity prices, increasing pressure on Prime Minister Shinzo Abe’s government to supplement exploration budgets. Spending will plunge 37 percent to about 1.2 trillion yen ($11 billion) in the year to March, the country’s Ministry of Economy, Trade and Industry forecast in a report Tuesday.

The drop, just one slice of cuts globally, adds urgency to the government’s plans to sustain investment by the country’s explorers and accelerate efforts to get 40 percent of its oil and gas from domestic firms. The world’s biggest consumer of liquefied natural gas and fourth-largest crude buyer relies on imports for 94 percent of its primary energy supply, according to the country’s Federation of Electric Power Companies.
Japan may allocate 3 trillion yen over the next five years to help develop large-scale oil and gas developments with state-run Japan Oil, Gas and Metals National Corp. investing in projects, the Nikkei newspaper reported last month.
Hoax. Most of us here in Texas knew this was a hoax when it was first reported. Glad to see The New York Times picked up the story:
The case of the chocolate cake slur, it seems, was simply a hoax.
An openly gay Texas pastor who had accused Whole Foods of defacing his cake with an anti-gay slur dropped his lawsuit against the grocery chain on Monday, issuing an apology that said he was wrong to “perpetuate this story.”
“The company did nothing wrong,” the pastor, Jordan Brown, said in a statement. “I was wrong to pursue this matter and use the media to perpetuate this story.”
He also apologized to the lesbian, gay, bisexual and transgender community “for diverting attention from real issues.”
Whole Foods had forcefully rejected the accusations by Mr. Brown, 31, who claimed that he had bought a frosted cake from a store in Austin, TX, and asked that the words “Love Wins” be written in icing on top — only to discover while driving away that a slur had been added.
Mr. Brown’s apology represented a remarkable about-face from his remarks last month, delivered at a news conference alongside his lawyer, during which he choked back tears as he told the story.
Headlines From Today's WSJ

Maybe I will get to these later, maybe not. Doesn't matter. 
  • The Canadian fire isn't over: another 8,000 oil-sands workers evacuated when wind shifted.
  • Home Depot boosts guidance on strong same-store sales.
  • American farmers face oversupply of cheese, meat -- pushing down prices.
  • Girls beat boys in US test of technology literacy.
  • Scotch whisky exports stabilize, with modest decline in 2015.
  • Video: worth a watch -- world's largest cruise ship makes maiden voyage; Southampton, England, to France; the inaugural voyage to Barcelona; this thing is huge; words can't describe it
  • Getting a lot of press: Warren Buffett's investment in Apple (technically it was the "heirs" that made the investment, not Warren -- $1 billion
  • Tiger Woods' golf demonstration does not go as planned; hits three shots into water at Congressional. Link here.  This was a par 3 tenth hole, perhaps one of the easiest holes for pros.  This was a "trial run, a demonstration" -- not part of a tournament.
Detroit Public Schools

From The Los Angeles Times.

Look at the numbers coming out of Detroit public school system:
  • 2002 - 2003: 164,496 students
  • 2015 - 2016: 47,000
K-12 students overall in Detroit: public, private, charter:
  • 2002: 201,774
  • 2012: 119,758
Charter schools
  • publicly funded
  • privately run
  • scaled up rapidly in last decade
2011: Education Achievement Authority
  • separate entity aimed to improve Detroit's worse schools
  • now with 6,000 students
2009: Detroit public schools put under control of state-appointed manager
  • manager of the state-appointed emergency manager of the Detroit public school district: the same guy who just resigned over his involvement in the Flint water crisis
Answer To Hollywood's Sexism?

The [London] Times: Susan Sarandon thinking of directing porn.
Female directors make sex on screen more interesting, Susan Sarandon has claimed, as she sets her sights on making the pornography industry more acceptable to women.
The Oscar-winning actress said that female directors were less embarrassed about exploring the reason people have sex and “what the scene is supposed to tell you about these people”.
Sarandon was speaking at the Cannes Film Festival, which has often been overshadowed by accusations of sexism. There is annual criticism of the low number of female directors, and last year it emerged that festival organisers demanded that women attending red-carpet events had to wear.
A quick nexus search on the blog reveals some interesting dots that connect: Apple, Blu-Ray, Paglia, Mulholland Drive, Rocky Horror Picture Show.

Later, February 6, 2019: Bree Mills over at The Daily Beast. Ready to go "mainstream" with porn.  A name to watch.